After thinking about this a little more, I remembered that I had a very similar situation with my T once. I kept pursuing things motor related, but finally thought about taking the turbo off, and looking at it closer. I had checked it on the car and was not able to determine any shaft play, but once I took it off the car and put it on the workbench, I discovered the center shaft and impellers were toast.
It had snapped a retaining clip inside, and therefore wore the impellers down on the housing, as the whole shaft moved back and forth. Bingo!!! My problem was found!
If you have checked the turbo with it still on the car, I would advise you to actually take it off the car, and even remove the housings if need be. If the seals are loose or damaged, it would explain the smoke.
Hope it works for ya'... I know it's gotta be frustrating!